## Policy Summary: Incentive Scheme to Promote Critical Mineral Recycling
The Union Cabinet has approved a Rs. 1,500 crore Incentive Scheme to promote critical mineral recycling in India. This scheme, under the National Critical Mineral Mission (NCMM), aims to bolster domestic capacity and supply chain resilience by incentivizing the separation and production of critical minerals from secondary sources like e-waste, Lithium-Ion Battery (LIB) scrap, and other scrap materials (e.g., catalytic converters). The scheme will operate for six years, from FY 2025-26 to FY 2030-31.
The scheme targets both large, established recyclers and small, new recyclers, including startups, with one-third of the scheme's outlay earmarked for the latter. It applies to investments in new units and the expansion, modernization, and diversification of existing units. Incentives are specifically directed towards the recycling value chain involved in the actual extraction of critical minerals, excluding activities focused solely on black mass production.
The incentive structure includes:
* **Capex Subsidy:** 20% on plant machinery, equipment, and associated utilities for starting production within a specified timeframe. Reduced subsidy will apply beyond this timeframe.
* **Opex Subsidy:** An incentive on incremental sales over the base year FY 2025-26, comprising 40% of the eligible Opex subsidy in the 2nd year and the remaining 60% in the 5th year (from FY 2026-27 to FY 2030-31), contingent on achieving specified threshold incremental sales.
To ensure broader participation, the total incentive (Capex plus Opex subsidy) per entity is capped at Rs. 50 crore for large entities and Rs. 25 crore for small entities. Within these limits, Opex subsidies are further capped at Rs. 10 crore and Rs. 5 crore, respectively.
The scheme is projected to develop at least 270 kilo tons of annual recycling capacity, resulting in approximately 40 kilo tons of annual critical mineral production. This is expected to attract around Rs. 8,000 crore of investment and create nearly 70,000 direct and indirect jobs. The Ministry of Mines formulated the scheme after several rounds of consultations with industry and other stakeholders.
Key Entities Referenced
Ministry of Mines: The government ministry responsible for the Incentive Scheme to promote Critical Mineral Recycling.
Rs.1,500 crore Incentive Scheme: A financial program by the Union Cabinet to promote critical mineral recycling in the country.
Shri Narendra Modi: The Prime Minister who chaired the Union Cabinet approving the Incentive Scheme.
National Critical Mineral Mission NCMM: A government initiative aimed at building domestic capacity and supply chain resilience in critical minerals.
Lithium Ion Battery LIB: A type of battery; scrap from these batteries is an eligible feedstock for the recycling scheme.
FY 202526: The base year for Opex subsidy calculation in the Incentive Scheme.
Delhi: Location of Press Information Bureau (PIB).
Ministry of Mines
Cabinet approves Rs.1,500 crore Incentive Scheme
to promote Critical Mineral Recycling in the country
Scheme incentives to develop capacity to recycle
battery waste and e-waste for extraction of critical
minerals
Posted On: 03 SEP 2025 7:17PM by PIB Delhi
The Union Cabinet chaired by the Prime Minister Shri Narendra Modi today approved a Rs.1,500 crore
Incentive Scheme to develop recycling capacity in the country for the separation and production of critical
minerals from secondary sources.
This scheme is part of the National Critical Mineral Mission (NCMM), which is aimed at building the
domestic capacity of and supply chain resilience in critical minerals. The critical mineral value chain
comprising exploration, auction and mine operationalization, and acquisition of foreign assets, has a gestation
period before they could supply critical minerals to Indian industry. A prudent way to ensure supply chain
sustainability in the near term is through the recycling of secondary sources.
The Scheme will have a tenure of six years from FY 2025-26 to FY 2030-31. Eligible feedstock is e-waste,
Lithium Ion Battery (LIB) scrap, and scrap other than e-waste & LIB scrap e.g. catalytic convertors in end-of-
life vehicles. Expected beneficiaries will be both large, established recyclers, as well as small, new recyclers
(including start-ups), for whom one-third of the scheme outlay has been earmarked. The Scheme will be
applicable to investments in new units as well as expansion of capacity / modernization and diversification of
existing units. The Scheme will provide incentive for the recycling value chain which is involved in actual
extraction of critical minerals, and not the value chain involved in only black mass production.
The incentives under the Scheme will comprise 20% Capex subsidy on plant & machinery, equipment and
associated utilities for starting production within specified timeframe, beyond which reduced subsidy
applicable; and Opex subsidy, which will be an incentive on incremental sales over the base year (FY 2025-
26) viz. 40% of eligible Opex subsidy in the 2nd year and balance 60% in the 5th year from FY 2026-27 to
FY 2030-31 on achievement of specified threshold incremental sales. In order to ensure greater number of
beneficiaries, total incentive (Capex plus Opex subsidy) per entity will be subject to an overall ceiling of
Rs.50 crore for large entities and Rs.25 crore for small entities, within which there will be a ceiling for Opex
subsidy of Rs.10 crore and Rs.5 crore respectively.
In terms of key outcomes, the Scheme incentives are expected to develop at least 270 kilo ton of annual
recycling capacity resulting in around 40 kilo ton annual critical mineral production, bringing in about
Rs.8,000 crore of investment and creating close to 70,000 direct and indirect jobs. Several rounds of
consultations with industry and other stakeholders have been held through dedicated meetings, seminar
sessions, etc. before formulating the Scheme.
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MJPS/BM(Release ID: 2163455)